Gambling.com's Sharp Decline Amid SEO Woes Contrasts with Optimistic Undervaluation Claims

What happened

Gambling.com Group's stock has plummeted over 60% in 2025, driven by severe SEO-driven traffic losses from Google algorithm changes that led to multiple guidance cuts and EBITDA margin compression to the low-30s. In response, the company is diversifying into higher-margin sports-data subscriptions, now about 25% of revenue and growing rapidly, though this hasn't fully offset marketing declines. A Seeking Alpha article published in early 2026 touts the stock as deeply undervalued with over 200% upside based on DCF analysis, while downplaying traffic losses and emphasizing manageable debt. However, the DeepValue report reveals underlying risks, including persistent new depositing customer declines, significant fixed earn-out payments for acquisitions like OddsJam, and a shift in market sentiment to cautious with consensus moving to Hold. The narrative underscores a disconnect between optimistic external commentary and the sobering execution challenges highlighted in regulatory filings.

Implication

The current low valuation reflects market pessimism about SEO headwinds, but if management delivers on its reset guidance and sports-data growth scales to over 30% of revenue, significant upside to the base case $7.50 is possible. However, further guidance cuts or failure to meet $80 million in OddsJam earn-outs could stress the balance sheet, pushing the stock toward the bear case $4.00, emphasizing the thin margin of safety. Key catalysts include upcoming quarterly reports showing NDC stabilization, progress on sports-data mix, and earn-out settlements, which will test management's ability to navigate diversification without equity dilution. While the Seeking Alpha article highlights undervaluation, it overlooks critical risks like EBITDA margin erosion and leverage, making the DeepValue report's cautious stance more actionable. Ultimately, investors must balance the potential for recovery with the reality of ongoing volatility and execution uncertainty in a shifting digital landscape.

Thesis delta

The Seeking Alpha article reinforces the undervaluation narrative but glosses over the execution risks and balance sheet pressures detailed in the DeepValue report. The core thesis remains that GAMB is a potential buy if it stabilizes marketing and scales sports-data, but no shift occurs; instead, the article's optimism should be critically weighed against the report's evidence of persistent headwinds and modest conviction.